New internet technology has quickly become a way of everyday life. Around 30% of the intermediaries that Groupama works with have some sort of web presence.
The figure is expected to rise rapidly in coming years as the internet revolution really takes hold. For customers, as a way of communicating it is direct, quick and involves minimal effort. For intermediaries the chief benefit of the internet is that it offers an interactive sales distribution channel. To grasp it presents an opportunity to cut overheads and to reach a potentially wider audience.
The positive impact the internet can have on an intermediary's business is clear, but there are some important issues that need to be addressed to ensure that the wonders of the net don't become a nightmare for insurers and their intermediaries.
It is great that so many brokers can now say they have a web presence, but let's, as an industry, ensure that there are no discrepancies in the quotes given from the quotation system and those from the website.
Research conducted by Groupama has identified that an increasing number of intermediaries are using the data from their quotation systems to drive the quotes provided on their websites. While this would seem a sensible solution, there are some important considerations that they should take into account.
Firstly, insurer's products provided to software houses are forwarded to intermediaries in the form of software loaded onto their software house systems.
Issues can possibly arise when a website is interfaced to the intermediary's back office system. On the face of it, this appears to be a relatively simple operation but complications can arise in relation to underwriting areas such as vehicle security. These types of risk may not be rated correctly because of the structure of the product, and therefore may require manual intervention by the intermediary if the policy is sold online, to ensure accuracy.
Secondly, in order to cope with the variation within insurer products, the software houses' comparative quotation engines have to ensure that each insurer has the information it needs to provide a quotation. These question sets help to rate the policyholder accurately, asking, for example, whether they are married or single, male or female.
However, in designing and building a website, more often than not cut-down versions of the full question set are used for ease of use by the consumer. Any questions they do not ask are defaulted to set answers. This again may create inconsistencies in the way customers are rated. These two factors could result in intermediaries unwittingly pricing themselves out of the market – or doing the opposite and undercutting the required quotation.
Trust is the most important commodity a business should look for in its relationships with customers. By providing inconsistent quotes, trust is destroyed and any hope of encouraging transactions over the internet is put in jeopardy.
Furthermore a large number of insurers, including Groupama, guarantee the ratings provided on office-based quotation systems. This presents a problem if the ratings become skewed because they are loaded incorrectly onto the website. The guarantees are in place to protect the policyholder and to improve service delivery for the intermediary. But can these guarantees translate to the internet if the office based product cannot fit the question set being used on the website?
The exact size of the problem is hard to evaluate at this time, but Groupama believes action should be taken now to ensure that these issues do not hinder the development of internet technology and the huge benefits it can bring to insurers and intermediaries.
We believe that the insurance industry should be supporting intermediaries as they develop their web presence. Groupama is working with the software houses to draw up a list of basic internet compliances to which intermediaries should adhere when presenting information on their websites.
The need for trust
Information such as data protection and security policies go a long way towards making the website more user-friendly and improving the relationship between policyholder and intermediary. Again this comes back to the need for trust in what is on offer.
The Association of British Insurers' Code of Practice contains a list of recommendations for setting up a website and the information that should be displayed. However they have no powers of enforcement. The General Inusrance Standards Council rulebook goes further, with the list of requirements and guidance notes for members, which will be enforceable.
Groupama's vision of the future is that software houses will refer to a standard list of compliances when they are building websites for intermediaries, thereby setting an industry standard. We are in consultation with other insurance companies while drawing up the list, so that we can ensure that it is appropriate to the industry's needs.
The internet is still a very new medium and there is a general lack of understanding of some of the deeper seated issues involved in launching a website. Increased awareness of these topics would prevent many of the problems that are just beginning to surface.
A significant number of businesses are now trading online, and there will surely be more to follow. If it is done correctly it will make life easier and more efficient for intermediaries and insurers. But like everything in life, planning is essential and intermediaries need to take time to assess what is expected from a website and then plan to achieve their objectives.
The key to a successful website is to never forget that many of the same issues apply in the virtual world as in the real world. Efficiency, accuracy and high levels of customer care and information are still of paramount importance. Websites offer a direct reflection of the industry and the way it does business. Accordingly, it is important that our industry takes the time to present the best image it can.